Nadya Eka Lestari
TechInAfrica — South Africans might know TymeBank, a newcomer in banking which launched a zero-fee account last year, or Naked Insurance, Pineapple, and Click2Sure from insurance scene, or Snapscan and Yoco payment devices from its pop-up stalls everywhere.
However, there are vast fintech startups that most people do not familiar with. They are disruptors in banking, payments, investments, and insurance and ready to win the race with the leading competitors.
The 2019 Rand Merchant Bank’s SA Fintech in Motion Report says while retail banking and insurers have seen the most fintech disruption, investment banking, and capital markets are starting to feel the winds of change too.
There is a sea of fintech startups — all under-the-radar players — and here are 4 SA fintechs with notable work that people should watch this year.
OkGo.live
This on-demand car insurance startup is one of the fintech companies that were each awarded R2m grant and support packages by AlphaCode, the incubation program backed by Rand Merchant Investments, a similar program as Livestock Wealth — a crowdfunding platform for farmers — where stokvels administration platform, Stokfella, also graduated from.
OkGo.live is targeting old car owners who cannot afford insurance. Similar to Naked, it allows consumers to activate cover when they need it. What distinguishes the startup from other car insurance is that it uses second-hand and refurbished car parts to repair cars that have been in accidents to further push down the cost of car insurance.
The People’s Fund
This is a platform that allows ordinary people and investors to back experienced entrepreneurs who have secured contracts but cannot afford to begin the work. It goes a step further than invoice-backed financing by going out on a limb on business owners at the beginning of their new projects.
One of the co-founders, Luyanda Jafta, says the fund was established after detecting a gap in the financing of SMEs, especially those who have secured government contracts as banks are sometimes reluctant about projected cash flow from state tenders.
The People’s Fund does not charge SMEs interest. Instead, its investors get a pre-determined share of the profit that the project they are financing generates. Initiatives like the People’s Fund are infringing into the space of private equity but with shorter lock-in periods for investors.
Isiduli
Isiduli, another recipient of the AlphaCode funding this year, will soon provide development credit to aspiring township landlords to build backyard rental stock.
Statistics SA’s 2018 General Household Survey showed that about 671,000 households in the country lived in formal backyard dwellings, while almost another million lived in informal backyard structures.
Isiduli has realized a huge potential of this market and could potentially take away some of the banks’ unsecured lending market.
Blockchain pilot in Khayelitsha
In contrast with the other three, this startup probably falls more in the regtech space because it is a pilot and a nonprofit.
The initiative, driven by three organizations — the Centre for Affordable Housing Finance in Africa, research consultancy 71point4, and Seso Global — is SA’s first blockchain-based property register.
Aside from recording government-subsidized houses that have not yet been registered on deeds registry. The platform is also assisting to facilitate formal house sales in the township, ensuring everything is on records.
The intervention should help simplify the informal house trading in townships which, according to 71point, has often left buyers with no plan of action on when previous owners who sold their homes in the informal market return to demand more money when house property values appreciate.
Source: fin24.com
